AsemconnectVietnam - Domestic fertilizer production and consumption are imbalanced, while the supply of urea and phosphate products is surplus, many other fertilizer products such as potassium, micronutrient fertilizers, and organic fertilizers are still in short supply.

That is the reason why Vietnam still has to import about 40% of DAP fertilizer (mixed inorganic fertilizer) and the entire amount of potassium fertilizer to meet domestic demand. According to information from the Vietnam Fertilizer Association, currently the country's fertilizer consumption reaches more than 11 million tonnes per year, while domestic fertilizer output reaches nearly 8 million tonnes per year.
The demand for urea for domestic agricultural production is only about 1.6 - 1.8 million tonnes per year. However, the urea production capacity of 4 domestic factories includes Ca Mau Fertilizer and Phu My Fertilizer factories (belonging to Vietnam Oil and Gas Group); Ninh Binh Fertilizer and Ha Bac Fertilizer Plants (belonging to Vietnam Chemical Group) have reached about 3 million tonnes. Therefore, up to this point, the domestic supply of urea fertilizer has far exceeded the demand.
This situation is similar to phosphate fertilizer, the demand for direct superphosphate fertilizer is 500,000 tonnes per year, and the amount of superphosphate raw material for NPK synthetic fertilizer production is about 600,000 tonnes per year. However, the total production capacity of superphosphate fertilizer currently belongs to Lam Thao Superphosphate and Chemical Joint Stock Company, Southern Fertilizer Joint Stock Company, Duc Giang Chemical Group Joint Stock Company (part of Vietnam Chemical Group). ); Superphosphate Apromaco Lao Cai of Agricultural Materials Company reaches about 1.5 - 1.6 million tonnes per year. In addition, the fused phosphate fertilizer output of three phosphate fertilizer plants (Van Dien, Ninh Binh, Lao Cai) is about more than 600,000 tonnes per year. It is estimated that superphosphate fertilizer production capacity is surplus at about 1 - 1.1 million tonnes per year.
Enterprises producing urea and phosphate fertilizers are implementing many solutions to expand export markets to increase consumption and ensure production and business efficiency. According to statistics from the General Department of Customs, in the first 2 months of 2024, fertilizer exports reached more than 335,000 tonnes, an increase of 35% in output and 22% in value compared to the same period in 2023.
Vietnam's fertilizer exports are mainly to the Cambodian market, which alone accounts for 38% of the country's total fertilizer export volume and turnover in 2023. Second is the Korean market, accounting for 5.8% of the total volume and 5.4% of the total fertilizer export turnover. The Malaysian market accounts for 6.3% of total volume and 5.2% of total turnover.
Vice President and General Secretary of the Vietnam Fertilizer Association Phung Ha said in the current context, appropriate support policies are needed to promote fertilizer exports for businesses producing urea fertilizer as well as Phosphate fertilizer works effectively, avoiding the need to downsize production.
However, domestic fertilizer businesses are currently subject to a 5% export tax, making it difficult for Vietnamese fertilizers to compete with foreign products of the same type. Reality also shows that Vietnam's urea exports are facing fierce competition from urea sources from some countries in the region such as Indonesia, Malaysia, and Brunei... where manufacturers are not subject to the 5% export tax.
At the end of 2023, the Vietnam Fertilizer Association sent an official dispatch to the Ministry of Finance for comments on the Draft Decree amending and supplementing Decree No. 26/2023/ND-CP on Export Tariff and Import Tariff incentives, including a proposal to reduce the export tax rate of some types of fertilizers such as urea, superphosphate, and SOP (high-quality potassium fertilizer) to 0%, instead of the current 5% rate. The Association hopes that the State will review tax policy to encourage urea exports and create equal competition between domestic and imported fertilizer businesses.
T.Huong
Source: Vitic/Kinhtedothi